Bitcoin is gyrating amid rallying global stock markets while ether options traders ramp up open interest as the Ethereum network heads for an ambitious upgrade.
- Bitcoin (BTC) trading around $15,384 as of 21:00 UTC (4 p.m. ET). Gaining 0.05% over the previous 24 hours.
- Bitcoin’s 24-hour range: $14,845-$15,842
- BTC above its 10-day and 50-day moving average, a bullish signal for market technicians.
After bitcoin rallied over $200 on news that Pfizer’s vaccine trial showed it was 90% effective in preventing coronavirus infections, the price suffered a drop of almost $1,000 within hours Monday. The sell-off went from $15,842 shortly after Pfizer’s announcement early in the morning to as low as $14,845 around 16:30 UTC (8:30 a.m. ET). It has since recovered, changing hands at $15,389 as of press time, according to CoinDesk 20 data.
“Bitcoin’s retracement through the $15,000 level is a continuation of the gradual move downward during the past few days,” said Guy Hirsch, managing director for U.S. at multi-asset brokerage eToro. “Though today, it feels different than the likely profit-taking that occurred over the weekend.”
Cindy Leow, portfolio manager for multi-strategy crypto trading firm 256 Capital Partners, has been tracking bitcoin’s volume-weighted average price, or VWAP, as a indicator as prices take a break from a rally that took the world’s oldest cryptocurrency to record 2020 highs the past week. VWAP gives an average price at which an asset has traded throughout the day based on both volume and price.
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“In the short term, we’re entering into whipsaw markets that typically follow huge gains,” Leow noted. “We see immediate support at BTC’s monthly VWAP of $14,700, from which BTC has steadily bounced off of, indicating that buyers still maintain control.”
A change in market dynamics is also playing a role in staving off possible price downside. That’s due in large measure to the waning influence of leveraged derivatives venue BitMEX, which is facing lawsuits and the ire of U.S. regulators.
“It’s fascinating that this whole move up last week from $13,900 to $15,900 happened with so few long liquidations and barely any corrections so far,” Leow said. “We suspect this is largely an effect of trading volumes going from BTC-margined futures to USDT-margined futures, as USDT-margined traders are by default technically in a short BTC position.”
Liquidations on BitMEX, as tracked by data aggregator Skew, are on the decline.
Meanwhile, traditional markets are seeing major action Monday, the first trading day since a clear winner in the U.S. presidential election was decided. Former Vice President Joe Biden is set to take office in early…